THE 


PROPOSED  CHANGES 


IN 


THE  TELEGRAPHIC  SYSTEM. 

BY 

GARDINER  G.  HUBBARD. 


Reprinted  from  the  North  American  Review,  July,  1873. 


BOSTON: 

JAMES  R.  OSGOOD  AND  COMPANY, 

Late  Ticknor  &  Fields,  and  Fields,  Osgood,  &  Co. 

18T3. 


) 


University  Press:  Welch,  Bigelow,  &  Co., 
Cambridge. 


r 


PROPOSED  CHANGES 


t<S 


IN 

THE  TELEGRAPHIC  SYSTEM. 


The  present  age  has  witnessed  greater  changes  in  the  habits 
of  the  people,  and  the  methods  of  transacting  business,  than 
many  previous  generations.  This  is  mainly  due  to  the  accu¬ 
mulation  of  wealth  in  the  nation,  which  has  probably  been 
greater  within  the  last  twenty  years  than  in  all  its  previous 
history,  and  to  the  increase  and  wide*  dispersion  of  its  popula¬ 
tion.  There  is,  undoubtedly,  more  wealth  and  comfort,  espe¬ 
cially  among  the  laboring  classes,  than  at  any  previous  era,  but 
the  tendency  is  to  heap  up  enormous  wealth  and  power  in  a  few 
hands  and  in  large  corporations.  While  we  do  not  believe  that 
the  poor  are  growing  poorer,  we  do  think  the  rich  are  growing 
;v  richer,  and  that  the  disparity  between  the  two  classes  is  con- 
\h  tinually  increasing.  A  few  firms  in  the  large  cities  transact 
5  the  largest  part  of  the  business  in  each,  where  formerly  a  much 
^smaller  amount  was  divided  among  ten  times  as  many  firms. 
-Two  or  three  large  manufacturing  companies  employ  more 
J  hands  and  capital  than  did  all  our  factories  combined  thirty 
S  years  ago ;  while  a  few  large  railroad  and  coal-mining  compar 
nies  control  the  anthracite  coal  mines,  and  set  the  price  of  one 
half  the  coal  mined  in  this  country.  The  same  tendency  is 
)-  noticed  in  England  and  on  the  Continent  of  Europe.  Mr. 
in  Gladstone  has  said  that  England  has  accumulated  greater 
wealth  in  fifty  years  than  in  the  previous  eighteen  hundred, 
and  more  in  the  last  twenty  than  in  the  preceding  thirty  years. 
The  evil  effects  of  this  tendency  are  less  felt  abroad,  since 
along  with  this  increase  of  wealth  the  influence  of  the  laboring 


4 


classes  has  been  steadily  progressing,  and  they  are  now  felt  as 
a  power,  where  fifty  years  ago  their  opinions  were  disregarded, 
and  their  existence  was  scarcely  taken  into  consideration  in  the 
calculations  of  politicians.  The  laborer,  in  Europe,  is  gradu¬ 
ally  becoming  of  consequence  and  more  independent.  The 
political  character  of  our  people  is  changing.  We  are  becom¬ 
ing  more  cosmopolitan.  State  boundaries  and  State  rights  are 
less  and  less  regarded,  while  the  necessities  and  interests  of 
the  people  all  tend  towards  forming  a  nationality. 

This  accumulation  of  wealth  and  dispersion  of  the  popula¬ 
tion  are  due  in  a  greater  degree  to  the  introduction  of  steam 
and  the  telegraph  than  to  any  other  causes.  By  these  agen¬ 
cies  remote  places  are  brought  closer  together  than  were  for¬ 
merly  neighboring  towns.  Europe  is  nearer  New  York  than 
was  Boston  thirty  years  ago.  Transactions  with  China  and 
Japan  formerly  required  a  year  for  their  fulfilment;  now  the 
order  is  given  and  accepted  in  a  day,  and  filled  in  less  than 
three  months.  Most  of  the  large  sales  of  cotton  and  wheat 
are  made  by  telegraph,  and  millions  of  money  are  annually 
transferred  by  the  same  instrumentality,  thus  multiplying  many 
times  the  working-power  of  capital. 

The  prosperity  and  growth  of  city  and  country,  of  farmer 
and  manufacturer,  of  merchant  and  customer,  depend  on  the 
means  of  intercommunication.  The  market  is  generally  far 
removed  from  the  producer  or  factory,  and  the  necessity  for 
increased  facility  of  intercommunication  is  the  one  great  cause 
of  consolidation  in  our  country.  Without  it  we  should  be  a  mere 
confederacy,  and  no  nation.  This  necessity  has  led  to  the  or¬ 
ganization  of  a  new  class  of  corporations  required  by  the  necessi¬ 
ties  of  the  times  and  the  growth  of  the  country,  which  could 
not  exist  in  any  other  nation,  or  have  arisen  at  any  other  period 
of  history.  Their  power  is  felt  in  the  marts  of  trade,  by  the 
press,  and  in  legislative  assemblies,  controlling  legislation  at  the 
Federal  and  State  capitals.  This  influence  arises  from  the  con¬ 
centration  of  wealth  in  these  companies,  the  large  number  of 
their  employees,  and  from  the  great  ability  of  their  officers. 
They  grow  in  power  and  influence  daily.  The  benefits  which 
the  people  have  received  from  them  have  been  so  great  that  the 
power  they  have  insensibly  gained  has  not  been  generally  un- 


5 


derstood,  while  in  many  cases  their  interests  and  those  of  the 
people  have  been  identical.  Yet  these  corporations  have 
steadily  pursued  a  policy  which  has  best  subserved  either  their 
own  interests  or  that  of  their  managers,  —  the  interests  of  the 
people  being  secondary  and  often  entirely  disregarded.  The 
farmer  at  the  West  already  complains  that  the  only  use  he  can 
make  of  his  corn  is  to  burn  it  for  fuel ;  that  no  matter  what 
the  prices  at  the  seaboard  are,  the  freights  only  rise  and  fall  in 
such  a  way  that  the  result  to  him  is  the  same.  It  is  in  vain  to 
hope  that  such  evils  will  remedy  themselves,  or  that  these  cor¬ 
porations  will  voluntarily  surrender  any  powers  they  have  ac¬ 
quired,  or  limit  their  rates  by  any  other  rule  than  the  largest 
amount  they  can  exact.  The  time  will  come,  and  that  soon,  if 
this  policy  is  continued,  when  the  people  will  rise  in  their 
might  and  crush  these  monopolies.  It  is  necessary  that  the 
good  men  of  both  political  parties,  for  all  are  directly  or  indi¬ 
rectly  interested,  should  take  steps  to  correct  the  evil  in  these 
corporations,  that  they  may  be  reformed  rather  than  destroyed. 
Stockholders  and  officers  do  not  or  will  not  understand  their 
true  relations  to  tjie  public.  They  seem  to  think  that  their 
franchises  were  granted  by  the  State  solely  for  their  own  bene¬ 
fit,  and  that  they  can  use  these  trusts  in  the  same  way  they 
would  a  charter  for  a  strictly  private  corporation,  as  a  cotton 
or  woollen  mill.  They  forget  that  these  are  not  private,  but 
public  corporations  which  have  received  certain  privileges  from 
the  State,  in  consideration  of  their  promise  to  perform  certain 
duties  to  the  public  in  return.  Just  so  far  as  they  regard  this 
accountability,  and  only  so  far,  do  they  subserve  the  interests 
of  the  people,  and  the  prime  object  for  which  their  charters 
were  granted.  If  this  responsibility  were  continually  borne  in 
mind  by  the  officers  of  these  corporations,  and  acted  upon, 
their  relations  with  the  public  would  be  very  different  from 
those  which  now  exist.  The  rights  of  stockholders  in  public 
corporations  are  secondary,  and  are  not  entitled  to  the  same 
consideration  as  the  rights  of  the  public.  But  the  stockhold¬ 
ers  control  the  affairs,  and  all  the  officers  are  chosen  to  care 
for  those  interests  exclusively,  and  see  that  they  do  not  suffer. 
The  public  have  no  representative,  and  their  rights  are  often 
overlooked  or  disregarded.  Now,  while  it  is  vain  to  expect  any 


6 


progress  unless  capital  is  protected,  it  is  as  necessary  that  the 
welfare  of  the  people  should  also  be  cared  for ;  the  interests  of 
both  must  be  conserved,  for  if  the  rights  of  either  are  sacri¬ 
ficed,  they  will  ultimately  be  avenged. 

The  two  great  interests  which,  within  the  memory  of  even 
the  young,  have  assumed  such  controlling  power  are  the  rail¬ 
road  and  the  telegraph.  Kailroads  were  the  first  to  begin  to 
be  powerful,  and  they  were  fairly  under  way  when  the  first  line 
of  telegraph  was  constructed.  Similar  evils  have  been  experi¬ 
enced,  and  similar  benefits  conferred  by  each  of  these  wonder¬ 
ful  inventions.  Many  small  corporations  were  originally  or¬ 
ganized  which  constructed  lines  through  their  own  neighbor¬ 
hood  ;  then,  by  combinations  and  consolidations,  they  extended 
their  powers,  until  now  the  whole  country  is  covered  by  a  net¬ 
work  of  rails  and  wires,  which  are  controlled  by  very  few 
men.  One  instance  of  the  growth  of  a  railroad  corporation 
will  illustrate  the  process. 

The  line  between  Albany  and  Buffalo  was  originally  owned 
by  eight  or  ten  different  companies,  their  stock  and  indebted¬ 
ness  representing  only  the  actual  cost  of  the  road.  These 
companies  were  by  degrees  merged  into  one,  the  capital  stock 
and  bonded  debt  was  very  largely  increased,  and  the  conven¬ 
ience  of  the  public  greatly  promoted.  The  gain  to  the  corpo¬ 
rations  was  immense,  by  the  saving  of  expense  through  a  sin¬ 
gle  management,  and  by  great  stock  and  bond  dividends.  If 
there  had  been  no  more  stock  dividends  the  evils  would  have 
ceased,  and  the  rates  for  passengers  and  freight  would  have 
been  reduced  long  ago;  for  the  increase  of  business  would 
have  enabled  the  officers  to  make  a  great  reduction  of  rates 
without  any  reduction  of  dividends ;  but  just  as  rapidly  as 
the  business  and  profits  increased,  the  stock  dividends  in¬ 
creased,  until  that  company,  which  was  originally  represented 
by  fifteen  or  twenty  millions  of  capital  and  debt,  is  now  rep¬ 
resented  by  nearly  one  hundred  millions.  The  fictitious  capital, 
it  is  said,  amounts  to  $  110,145  per  mile  for  the  whole  length  of 
the  main  line,  upon  which  large  annual  dividends  are  declared, 
and  which  is  worth  its  par  value  in  the  market.  This  sum 
does  not  represent  money  actually  paid  in  by  the  stockholders, 
but  money  extorted  from  the  people  by  unnecessary  and  exor- 


•  T 

bitant  rates.  The  same  parties  who  control  this  line  of  rail¬ 
road  subsequently  acquired  possession  of  the  Hudson  River 
Railroad,  and  other  roads  running  from  Buffalo  around  the 
Lakes,  and  stretching  across  to  Chicago  ;  and  being  still  eager 
for  more,  they  have  reached  out  until  they  control  the  Union  * 
Pacific  Railroad,  its  roads  traversing  thousands  of  miles,  and 
its  capital  amounting  to  hundreds  of  millions.  We  have  not 
selected  this  line  because  its  capital  is  more  inflated  than 
others,  or  because  its  managers  are  more  censurable,  but  sim¬ 
ply  as  illustrating  the  tendency  of  corporate  power.  The  stock¬ 
holders  and  directors  are  not  alone  responsible  for  these  evils, 
for  the  public  has  witnessed  this  steady  growth,  has  participated 
in  the  benefits  of  these  consolidations,  and  has  ratified  and  ap¬ 
proved  them  by  silence.  It  is  time  that  a  change  in  the  policy 
of  these  corporations  should  be  made,  that  the  rights  and 
interests  of  the  people  should  be  recognized ;  and  if  the  cor¬ 
porations  will  not  begin  it,  the  legislators  must,  or  the  evils  will 
become  intolerable. 

But  vast  as  the  railroad  power  has  become,  and  oppressively 
as  it  is  exercised,  it  is  not  yet  absolutely  unchecked ;  for  com¬ 
peting  lines  connect  the  East  and  West,  and  their  managers 
are  constructing  the  Northern  Pacific  and  the  Texas  Pacific 
Roads,  stretching  out  to  the  Golden  Gate  and  the  commerce  of 
the  Pacific  Ocean.  A  trial  of  strength,  like  the  war  of  the 
giants,  may  arise  between  these  rival  roads,  and  lower  rates 
may  for  a  time  be  obtained,  to  the  great  benefit  of  the  people. 
Two  new  lines  of  travel  from  the  Atlantic  will  soon  be  opened 
to  the  Mississippi  River,  which  may  bring  some  alleviation. 

The  attention  of  the  public  is  aroused  to  the  importance  of 
the  subject.  In  Massachusetts,  Mr.  C.  E.  Adams,  Jr.,  has  given 
to  it  the  best  consideration  of  one  of  the  most  thoughtful 
minds  of  a  State  prolific  in  great  men,  and  has  proposed  a 
novel  remedy,  which  we  trust  will  soon  be  tried  in  Massachu¬ 
setts.  In  the  Senate  of  the  United  States,  a  standing  com¬ 
mittee,  with  Mr.  Windom,  of  Minnesota,  at  its  head,  —  a  man 
of  excellent  judgment,  cool  and  discriminating  in  his  views,  — 
has  been  organized  to  consider  this  subject  in  its  national  rela¬ 
tions,  and  others  of  our  able  men  in  the  Senate  and  House  and 
throughout  the  land  are  striving  to  solve  the  problem.  Organ- 


8 


izations  have  been  recently  formed  in  some  of  the  Western 
States  which  portend  only  evil  to  these  corporations,  and  pos¬ 
sibly  to  capital  as  well. 

The  history  of  the  telegraph  shows  a  similar  growth,  but 
offers  no  hope  of  relief  through  competition.  The  first  tele¬ 
graphic  line  was  built  at  the  expense  of  the  government ;  but 
the  benefits  of  the  experiment,  which  became  a  success,  were 
reaped  by  the  projectors.  As  soon  as  the  line  between  New 
York  and  Washington  was  constructed,  companies  were  organ¬ 
ized  in  all  parts  of  the  country  to  build  lines  between  the  large 
cities.  The  actual  outlay  required  for  their  construction  was 
small ;  the  nominal  capital  and  the  expectation  of  profits  were 
large,  and  entirely  disproportioned  to  the  cost  of  construction  ; 
one  half  of  the  capital  stock  being  generally  set  apart  for  the 
owners  of  the  patent  through  whose  instrumentality  the  lines 
were  built.  These  lines  were  constructed  of  poor  materials,  in 
the  cheapest  manner,  the  constructors  and  managers  having 
little  knowledge  of  the  principles  on  which  telegraph  lines 
should  be  built  and  operated.  The  rates  were  low,  business 
small,  and  expenses  high.  The  correspondence  was  limited, 
and  the  expenses  greatly  increased  by  the  large  number  of 
short  lines  owned  by  different  corporations,  each  with  its  own 
set  of  officers,  operators,  and  repair  hands,  as  every  message 
had  to  be  repeated  at  the  end  of  each  line.  This  led  to  deten¬ 
tions,  inaccuracies,  and  irresponsibility.  As  if  these  evils  were 
not  enough,  the  patentees  and  owners  of  the  three  patents  of 
Morse,  House,  and  Bain  constructed  competing  lines  between 
the  large  cities.  A  few  of  these  companies,  from  peculiarly 
favorable  circumstances,  made  money ;  but  failure  was  the  in¬ 
evitable  fate  of  the  great  majority  ;  for  they  served  neither  the 
interests  of  stockholders  nor  of  the  public.  There  were  ten 
times  as  many  companies  as  at  present,  with  scarcely  one  tenth 
the  number  of  miles  of  wire,  or  one  tenth  the  business.  Many 
of  the  rates  were  lower  than  they  have  been  at  any  subsequent 
period ;  one  time  only  ten  cents  being  charged  between  Boston 
and  New  York. 

In  the  struggle,  the  weaker  lines  were  gradually  swallowed 
up  by  the  stronger,  of  which  the  principal  were  the  Western 
Union  Telegraph  Company  in  the  West,  and  the  American 


9 


Telegraph  Company  in  the  East.  Their  managers  became 
conscious  of  the  inherent  evils  of  a  system  formed  of  segre¬ 
gated  and  competing  lines,  and  saw  the  necessity  of  a  change 
of  plans  and  concert  of  action.  The  Western  Union  Company 
occupied  the  territory  from  New  York  west  to  the  Pacific  Ocean, 
with  the  exception  of  four  or  five  States,  where  two  allied 
companies  maintained  an  independent  existence.  The  Ameri¬ 
can  Telegraph  Company  controlled  the  sea-coast  and  cotton 
States.  These  companies  formed  an  alliance  offensive  and  defen¬ 
sive,  and  seemed  to  he  all  powerful,  and  the  era  of  prosperity 
for  the  stockholders  and  increased  rates  for  the  people  began. 

A  short  history  of  the  Western  Union  Company  will  illus¬ 
trate  the  rise  of  these  corporations.  It  was  incorporated  in 
the  year  1851 ;  but  it  paid  no  dividends  until  the  year  1858, 
the  profits  being  used  in  extensions,  and  purchase  of  other 
lines,  and,  it  is  said,  in  the  purchase  of  the  stock  of  parties 
who  had  become  tired  of  waiting  for  dividends,  either  directly, 
or  by  loaning  money  on  the  stock  purchased.  Then  the  few 
remaining  stockholders  began  to  reap  the  fruits  of  their  self- 
denial  in  a  very  rapid  increase  of  the  capital. 


In  1858  its  capital  stock  was . $  385,700.00 

Subsequently,  stock  was  issued  for  the  following  purposes : 

1858-1866.  For  cash  at  different  times  ....  167,200.00 

For  bonds  and  fractions  of  stock  dividends  .  146,600.00 

For  other  objects .  182,053.55 

For  stock  dividends  .....  17,810,146.45 
For  lines  purchased .  3,322,000.00 

•January  6,  1866.  Total  capital  .  .  .  .  $  22,013,700.00 


[In  1866  it  swallowed  the  two  other  principal  lines,  — the 
American  Telegraph  Company,  occupying  the  Eastern 
States  and  the  seaboard  route  South,  and  the  United  States 
Telegraph  Company,  a  new  line,  competing  with  both  the 
Western  Union  and  the  American  Telegraph.] 


1866. 


1869. 


Stock  for  United  States  Telegraph  Company 
and  United  States  Pacific  Telegraph  Com¬ 
pany  . .  .  . 

Stock  for  American  Telegraph 
Company  .  .  .  .  $  3,833,100 

For  dividends  to  American  Tel¬ 
egraph  Company  .  .  8,000,000 

Total  capital . 


$  7,216,300.00 


11,833,100.00 

$41,063,100.00 


10 


1866-1872.  Net  earnings  from  July  1,  1866  to  July  1,  1872,  $17,116,694.00 

These  earnings  average  7  per  cent  a  year,  divided  as  fol¬ 
lows  :  — 

Dividends  ....  $4,856,879.34 
Interest  and  sinking  fund  .  1,898,401.98 

Sundries,  etc.  .  .  .  10,361,412.91 


Stock  and  Cash  Dividends  from  1858  to  1866. 


Date. 

Per  cent. 

Capital  on  which  dividend  Amolml  „f  dilidend 

April  22,  1858 

414.40 

$  385,700.00 

$  1,598,300.00 

January  16,  1862 

27.20 

2,349,500.00 

640,446.65 

March  15,  1863 

100.00 

2,979,300  00 

2,979,300.00 

December  22,  1863 

331 

5,962,600.00 

1,988,100.00 

May  11,  1864 

100.00 

10,066,900.00 

10,066,900.00 

April,  1866 

25.00 

21,484,400.00 

537,100.00 

Total  stock  dividends  in  eight  years 

.  $17,810,146.65 

Total  cash  dividends  in  eight 

years  . 

4,157,242.00 

Total  dividends 

. 

. 

.  $  21,967,388.00 

Annual  average 

$2,745,922.00 

On  a  capital  of 

. 

• 

$385,700.00 

Besides  all  this 

increase 

of  capital,  a 

bonded  debt  of 

$  5,198,295  was  incurred  in  the  purchase  of  the  Russian  Ex¬ 
tension  Telegraph  and  other  lines.  In  the  years  1864-65  Mr. 
Collins,  on  behalf  of  himself  and  other  stockholders  in  the 
Western  Union,  began  to  build  an  overland  line  to  Europe  by 
Behring  Straits  and  Siberia.  The  work  was  begun  without  ade¬ 
quate  knowledge  of  the  difficulties  to  be  encountered,  through 
a  barren,  mountainous  country,  inhabited  only  by  a  few  In¬ 
dians  and  wild  animals,  with  an  almost  polar  climate ;  and  the 
attempt  encountered  unexpected  difficulties.  It  was  well  un¬ 
der  way  when  its  necessity  was  superseded  by  the  laying  of 
the  Atlantic  cable.  If  it  had  succeeded,  the  separate  organi¬ 
zation  would  have  been  continued  for  the  benefit  of  the  cor¬ 
porators  ;  as  it  was  a  failure,  the  loss  was  thrown  upon  the 
people,  and  the  bonds  of  the  Western  Union  Telegraph  Com¬ 
pany  were  issued  for  $2,500,000,  —  a  sum  supposed  to  be  equal 
to  the  entire  loss.  This  system  was  for  a  time  a  great  finan¬ 
cial  success ;  but  it  served  the  stockholders  much  better  than 


11 


the  public.  Much  of  the  correspondence  required  to  be  trans¬ 
mitted  over  the  lines  of  several  companies,  necessitating  repeti¬ 
tions,  inaccuracies,  and  delays.  If  the  customer  complained, 
it  was  impossible  to  determine  which  company  was  responsible 
for  any  error  or  delay,  and  he  was  left  without  redress.  The 
elements  of  a  national  system  were  lacking.  The  companies 
themselves  were  sensible  of  the  inherent  defects,  and  efforts 
were  made  at  different  times  to  effect  a  union  of  the  large 
companies,  but  without  success. 

In  1864  the  United  States  Telegraph  Company  was  organ¬ 
ized,  with  its  head-quarters  at  New  York,  for  the  purpose  of 
establishing  a  national  company,  with  wires  extending  north 
and  south,  from  Maine  to  Mexico,  and  from  the  Atlantic  to  the 
Pacific.  It  was  the  first  company  started  on  a  broad  basis, 
and  provided  for  the  economical,  prompt,  and  accurate  trans¬ 
mission  of  all  telegraphic  correspondence.  With  capital,  skill, 
and  time,  its  success  was  assessed  at  the  expense  of  the  other 
companies. 

The  Western  Union  and  American  Telegraph  Companies 
realized  the  power  of  this  new  rival  even  more  fully  than  did 
its  originators ;  for  they  knew  its  strength  and  their  own 
weakness. 

The  new  company  soon  began  to  pay  dividends,  supposed  to 
be  from  earnings,  but  in  reality  from  capital.  Both  of  the 
old  companies  made  overtures  to  it:  the  Western  Union  was 
successful  in  its  negotiations,  by  offering  many  times  its  cost 
or  value. 

It  was  merged  into  that  company  in  1866,  each  stockholder 
receiving  two  shares  of  stock  in  that  company  for  every  three 
of  the  other,  which  required  an  issue  of  $7,000,000  of  stock 
for  the  purchase  “  of  a  few  thousand  miles  of  almost  worthless 
lines.” 

This  forced  the  American  Telegraph  Company  into  a  consoli¬ 
dation  with  the  Western  Union,  which  immediately  followed 
the  other.  Its  capital  stock  of  $4,000,000  was  exchanged  for 
$12,000,000  of  stock  of  the  Western  Union  to  equalize  the 
nominal  value  of  the  two.  The  Western  Union  system  there¬ 
by  became  national. 

It  is  often  said  that,  as  competing  lines  can  be  constructed 


12 


at  a  small  expense,  the  public  have  a  remedy  for  any  evils  be¬ 
longing  to  the  present  system  in  their  own  power. 

This  suggestion  has  even  been  made  by  officers  and  stock¬ 
holders  of  the  Western  Union  Telegraph  Company.  The  re¬ 
sults  of  past  experience  show  the  entire  fallacy  of  such  a 
remedy.  Telegraph  correspondence,  like  the  mail  service,  is 
with  all  sections  of  the  Union,  and  no  company  can  be  suc¬ 
cessful  that  is  not  national. 

In  this  respect  it  is  entirely  unlike  our  railroad  service, 
^liere  a  small  local  road  may  pay  large  profits,  and  serve  its 
immediate  constituency  better  than  a  large  company  could. 

The  recent  history  of  opposition  companies  confirms  these 
views. 

At  the  close  of  the  war  this  company  required  the  aid  of  the 
government  in  recovering  and  establishing  its  lines  upon  the 
railroads  of  the  South.  It  therefore  procured  the  passage  of 
an  act  of  Congress  in  1866,  which  gave  it  the  right  to  con¬ 
struct,  operate,  and  maintain  lines  of  telegraph  upon  all  the 
post  roads  of  the  country.  Foreseeing  that  the  time  might 
come  when  it  would  desire  to  sell  its  lines  to  the  government, 
a  provision  was  inserted  in  the  bill  that  Congress  should  have 
the  right  to  take  them  at  any  time  after  1871  at  an  appraised 
valuation.  The  Western  Union  Telegraph  Company  was  now 
for  the  first  time  without  a  competitor,  and  was  apparently 
secure.  But  its  lines  were  poorly  constructed  and  equipped, 
and  but  little  business  could  be  transacted  upon  them  in  com¬ 
parison  with  the  same  length  of  European  lines.  According  to 
a  report  made  by  Mr.  Cromwell  Varley,  an  experienced  elec¬ 
trician,  who  came  over  from  England  in  1868  to  examine  their 
lines,  the  insulation  was  scarcely  one  tenth  as  good  as  that  of 
the  English  lines,  and  “it  is  the  favorable  climate  which  per¬ 
mits  such  insulation  to  pay.”  In  conclusion,  he  said:  “  Your 
insulation  is  horrible  in  wet  weather,  and  getting  worse.  Take 
in  hand  those  lines  which  earn  most  of  your  money, —  the  Bos¬ 
ton  and  Washington  wires,  for  example,  —  reinsulate  one  half 
or  one  third  of  these  wires,  and  I  expect  you  will  find  them 
sufficient  for  your  present  traffic.” 

At  this  time  the  corporation  was  in  a  critical  condition  ;  its 
lines  were  poor,  and  its  capital  out  of  all  proportion  to  its  prop- 


13 


erty  or  business.  With  the  same  capital  it  now  has,  it  then 
had  less  than  one  half  its  present  length  of  wire  or  business. 
Its  rates  were  nearly  twice  as  high,  the  average  being  $1.40. 
It  could  easily  have  been  fatally  crippled  by  rival  lines,  if  par¬ 
ties  who  had  the  means  and  the  skill,  and  who  were  willing  to 
look  for  their  profit  to  the  investment,  had  constructed  them. 

New  rivals  entered  into  the  field  ;  but  they  all  inherited  the 
errors  of  the  Western  Union,  and  were  started  on  wrong  prin¬ 
ciples,  with  capitals  even  larger  in  proportion  to  the  length  of 
their  lines  or  their  business.  In  one  of  these  companies  each 
mile  of  wire  was  represented  by  $  800  of  capital,  while  the  cost 
was  probably  not  much  over  $  100.  The  principal  of  these 
were  the  Franklin,  Atlantic  and  Pacific,  the  Pacific  and  Atlan¬ 
tic,  the  Bankers  and  Brokers’,  and  one  or  two  other  smaller 
associations.  Competition  was  renewed,  rates  were  reduced, 
dividends  fell  off,  and,  according  to  the  assertions  of  the  West¬ 
ern  Union  Telegraph  Company,  “  These  competing  lines  have 
not  made  money  enough  to  keep  their  lines  in  repair.”  They 
have  never  paid  any  dividends,  and  their  stock,  it  is  said,  has 
no  market  value.  Combination  naturally  followed.  When  a 
business,  from  requiring  large  capital  or  other  circumstances, 
falls  into  the  hands  of  a  few  persons,  they  are  sure,  in  the  end, 
to  avoid  competition  by  combining.  Hence,  it  is  said  with 
truth  that  “  where  combination  is  possible,  there  competition 
is  impossible.”  Accordingly,  the  President  of  one  of  these 
companies  has  recently  testified  that  he  had  agreed  with  the 
Western  Union  Telegraph  Company  to  raise  the  rates,  thus 
putting  an  end  to  competition.  This  result  may  have  been 
brought  about  in  consequence  of  large  stockholders  in  the 
Western  Union  Telegraph  Company  having  become  interested 
in  the  other  lines.  The  business,  therefore,  is  now  controlled 
by  the  Western  Union  Company,  which  performs  nine  tenths 
of  it.  The  management  of  this  company  has  not  been  retained 
in  the  hands  of  its  original  stockholders,  nor  is  it  controlled 
by  those  who  have  invested  in  telegraph  stock  solely  with  a 
view  to  profit  by  the  development  of  its  business,  but  by  the 
same  parties  that  operate  the  New  York  Central  line  of  rail¬ 
roads,  —  a  combination  which  wields  the  most  extensive  rail¬ 
road  and  telegraph  systems  in  the  world.  This  statement  does 


% 


14 


not  represent  the  full  extent  of  its  power.  A  great  change  has 
taken  place  in  the  Western  Union  Company’s  affairs  since  its 
office  was  removed  to  New  York,  and  Messrs.  Orton  and  Palmer 
became  President  and  Treasurer,  and  the  engrossing  policy 
then  begun  has  been  pushed  with  all  their  sagacity  and  energy. 
No  dividends  have  been  paid  recently,  nor  will  any  be  for  some 
time  to  come.  The  profits  have  been  applied  to  the  repair, 
extension,  reconstruction  of  the  old,  and  to  the  construction  of 
new  lines,  and  in  the  purchase  of  the  stock  of  the  Company. 
The  stock  so  purchased  has  not  been  cancelled,  but  has  been 
transferred  to  the  company,  to  be  sold  or  divided  at  some  future 
time.  Concessions  have  been  made  in  the  rates,  the  business 
has  doubled,  the  lines  have  been  improved,  the  great  dispro¬ 
portion  between  the  value  of  the  property,  its  business,  and  its 
capital  has  been  to  a  considerable  extent  removed.  Competi¬ 
tion  has  ceased  and  can  never  be  renewed.  The  results  appear 
in  the  market  value  of  the  property,  which  in  January,  1869, 
was  $33  per  share,  and  in  January,  1873,  $85,  and  is  cheaper 
at  $85  than  it  was  in  1869  at  $33  per  share. 

What  is  the  effect  of  this  monopoly,  with  its  inflated  capital, 
upon  the  rates  and  growth  of  business  ?  According  to  the 
Company’s  published  statements,  its  average  rates  in  1868 
were  $1.10 ;  in  1869,  97  cents  ;  in  1870,  83  cents ;  in  1871, 
73t4q  cents;  in  1872,  72  cents.  The  Company  has  earned 
upon  its  nominal  capital  during  this  time  an  average  of  six 
and  a  half  per  cent  a  year.  If  the  capital  represented  the  cost 
of  the  property,  the  rates  might  have  b6en  reduced  one  third 
and  still  have  yielded  six  and  a  half  per  cent  upon  it.  The 
public  pay,  therefore,  nearly  $3,000,000  a  year  on  fictitious 
capital.  The  growth  of  the  business  is  indicated  by  the  number 
of  messages  transmitted  during  each  of  these  years,  namely:  — 


Rate. 

Messages. 

Rate. 

Messages. 

In  1868, 

$  1.10 

5,733,394 

In  1871,  .73^ 

9,115,010 

1869, 

.97 

6,548,465 

1872,  .72 

10,271,935 

1870, 

.83 

7,859,028 

being  an  increase  of  eighty  per  cent. 

This  increase,  large  as  it  seems,  is  entirely  disproportionate 
to  the  growth  of  either  the  railroad  or  the  mercantile  business 
of  the  country,  and  is  less  than  that  in  other  countries. 


* 


15 


Belgium  affords  a  striking  contrast  to  America  in  the  policy 
pursued  and  in  the  results  obtained.  In  the  year  1862, 105,278 
messages  were  transmitted,  at  one  and  a  half  francs.  In  1863 
the  rates  were  reduced  to  one  franc,  and  the  business  increased 
to  188,825,  or  eighty  per  cent.  In  1865  the  number  was 
332,718.  On  the  1st  of  December  the  rates  were  reduced  to 
half  a  franc,  and  the  next  year  692,536  messages  were  trans¬ 
mitted.  The  business  has  continued  to  increase  in  nearly  the 
same  ratio,  and  in  1871, 1,560,673  messages  were  transmitted, 
giving  an  increase  of  five  hundred  per  cent  in  six  years.  The 
number  of  messages  is  one  fifteenth  of  the  number  of  letters. 
This  diminution  of  rates  was  followed  by  a  reduction  of  the 
net  profits,  but  in  no  year  have  the  expenses  exceeded  the 
receipts,  and  the  net  profits  are  again  increasing.  The  net 
earnings  have  paid  the  entire  debt  incurred  in  the  construc¬ 
tion  and  extension  of  the  lines.  The  reduction  of  rates  was 
not  only  followed  by  an  increase  of  business,  but  by  extending 
the  use  of  the  telegraph  to  all  classes  of  people.  At  the  high 
tariff  seventy-seven  per  cent  was  on  commercial  matters,  while 
now  thirty-eight  per  cent  only  is  of  that  class,  although  the 
number  has  greatly  increased  ;  thirteen  per  cent  was  then  on 
social  matters,  now  fifty-eight  per  cent. 

The  Republic  of  Switzerland  soon  followed  the  example  of 
Belgium.  On  the  1st  of  January,  1868,  the  rates  were  reduced 
one  half,  and  the  correspondence,  which  had  been  increasing 
at  the  rate  of  only  four  per  cent  a  year,  nearly  doubled  at  once. 
The  number  of  messages  transmitted  in  1867  was  397,289  ;  in 
1868,  798,186;  and  in  1871, 1,700,000.  If  as  many  telegrams 
were  sent  in  this  country  as  in  Belgium  in  proportion  to  the 
correspondence,  there  would  be  about  forty  millions  a  year.  If 
as  many  in  proportion  to  the  population  as  are  transmitted  in 
Switzerland,  there  would  be  nearly  thirty  millions. 

It  is  said  that  those  examples  do  not  apply  to  our  country, 
and  that  it  does  not  follow  that  because  they  use  the  telegraph 
extensively,  we  should  do  so  if  our  rates  were  greatly  reduced. 
The  theory  of  the  Western  Union  Telegraph  Company  is  that 
the  business  depends  more  upon  the  despatch  obtained  than 
upon  the  rates ;  that  the  question  of  cost  does  not  enter  into 
the  consideration  of  its  customers  so  much  as  that  of  time ; 


16 


and  that  greater  promptness  in  transmission  is  demanded, 
rather  than  lower  rates.  There  is  no  doubt  that  this  is  true 
under  the  present  circumstances.  The  rates  are  exorbitant 
and  prohibitory  of  many  kinds  of  business,  ten  per  cent  only 
being  on  social  matters.  The  experiment  of  low  rates  has 
never  been  tried  in  this  country,  excepting  between  two  or 
three  large  cities  in  the  East,  and  the  results  there  have  never 
been  published.  With  a  reduction  of  rates  the  character  of 
the  business  would  be  changed,  the  number  of  customers 
and  messages  would  be  greatly  increased,  and  similar  results 
be  obtained  here  as  abroad.  European  statistics  show  that 
with  high  rates  the  telegraph  was  used  even  less  than  with  us, 
and  solely  for  commercial  purposes,  and  that  it  is  the  reduced 
rates  that  have  increased  the  business.  The  effect  would  be 
much  greater  here,  because  the  value  of  the  telegraph  depends 
upon  the  time  gained  in  the  transmission  of  correspondence. 
If  in  Belgium,  where  there  is  only  a  gain  of  an  hour’s  time,  the 
growth  of  business  by  the  reduction  has  been  fifteen  hundred 
per  cent  in  ten  years,  the  effect  would  be  greater  in  this 
country,  where  the  gain  in  time  is  from  one  hour  to  ten  days. 

While  it  is  true  as  a  general  rule  that  the  growth  of  the 
telegraphic  correspondence  is  so  great  that  the  net  receipts 
will  be  diminished  by  any  reduction  of  tariff,  yet  it  is  also  true 
that  any  considerable  reduction  of  rates  will  greatly  increase 
the  business  without  a  corresponding  increase  of  expendi¬ 
tures.  European  and  American  statistics  both  establish  this 
proposition.  Striking  and  instructive  results  are  afforded  by  a 
comparison  of  the  statistics  of  North  Germany,  Belgium,  Hol¬ 
land,  and  Denmark  for  the  years  1865  and  1870.  In  North 
Germany  the  increase  in  the  number  of  messages  was  259 
per  cent,  increase  of  expenditures  only  88  per  cent ;  the  ex¬ 
penses  increasing  only  one  third  as  rapidly  as  the  business. 
In  Belgium  the  increase  of  messages  was  252  per  cent;  of 
expenditures,  61  per  cent ;  the  expenses  increasing  one  fourth 
as  rapidly  as  the  business.  Increase  of  messages  in  Holland, 
142  per  cent ;  of  expenditures,  62  per  cent,  or  one  half  as  great 
as  the  business.  In  Denmark  the  increase  of  messages  was  149 
per  cent ;  of  expenditures,  88  per  cent,  or  only  one  fourth  as 
great.  The  same  is  true  of  the  Electric  and  International  Tel- 


IT 


egraph  Company,  the  largest  English  company,  which  in  four 
years,  from  1862  to  1866,  increased  its  business  nearly  105  per 
cent,  while  its  working  expenses  were  only  increased  40  per 
cent,  and  the  net  product  80  per  cent.  The  statistics  of  the 
Western  Union  show  the  same  results,  the  business  having  in¬ 
creased  in  five  years  80  per  cent,  with  only  2T  per  cent  increase 
of  the  expenses,  and  a  reduction  of  only  one  per  cent  in  the 
net  profits.  It  is  therefore  shown  that  a  reduction  of  fifty  per 
cent  in  the  rates  will  be  followed  by  an  immediate  increase  in 
the  business  of  about  one  hundred  per  cent,  with  an  increased 
expenditure  of  about  one  third,  and  that  this  immense  devel¬ 
opment  of  the  business  and  of  benefit  to  the  public  may  be 
gained  without  much,  if  any,  reduction  of  the  net  profits.  But 
corporations  will  not  make  reductions  in  rates  simply  for  the 
public  benefit.  It  is  more  difficult,  and  requires  greater  exec¬ 
utive  ability,  to  manage  a  large  business  with  small  profits  on 
each  item  than  to  conduct  a  small  business  with  large  profits. 
It  is  in  this  that  the  difference  between  a  corporate  and  a 
postal  service  consists.  The  first  looks  only  to  realizing  the 
largest  profits,  and  regulates  its  facilities  and  extends  its 
business  with  that  view  only,  the  public  service  being  hut  the 
accessory.  The  other  seeks  the  greatest  extension  of  the 
business  which  can  be  made  without  loss,  the  public  service 
being  the  chief  object. 

It  is  thus  shown  that  the  use  of  the  telegraph  has  increased 
rapidly  abroad  and  slowly  with  us,  when  the  very  reverse  ought 
to  be  true.  Scarcely  any  new  lines  are  constructed  there,  while 
here  new  territory  is  peopled,  and  an  average  of  over  twenty 
thousand  miles  of  wire  are  added  yearly  to  our  lines.  Our  hab¬ 
its,  business,  social  condition,  national  energy,  and  extended 
territory,  all  favor  a  much  more  rapid  increase  in  the  use  of  the 
telegraph  here  than  abroad.  The  contrary  result  can  only  be 
due  to  the  fact  that  the  business  is  managed  in  the  interests  of 
monopoly.  Where  the  telegraph  is  managed  by  the  govern¬ 
ment,  the  interests  of  the  people  are  better  regarded ;  the  rates 
are  the  lowest,  the  facilities  the  greatest,  and  this  is  obtained 
without  the  imposition  of  any  tax,  those  who  use  the  telegraph 
paying  for  it.  These  effects  are  due  to  the  different  systems 
in  operation,  —  in  one  the  corporate,  in  the  other  the  postal. 


2 


18 


The  different  theories  of  these  systems  have  been  very  fully 
set  forth  in  a  recent  work,  published  by  Sir  James  Anderson, 
entitled  “  Statistics  of  the  Telegraph.’’  In  this  he  enunciates 
several  propositions,  which  are  the  key  to  the  whole  matter. 
First,  that  the  normal  growth  of  the  telegraph  is  so  rapid  that 
the  net  earnings,  at  a  high  rate,  will  be  greater  than  at'  any 
reduced  rate.  Second,  that  a  reduction  of  tariff  for  interior 
traffic  has  in  nearly  every  instance  produced  an  enormous 
increase  of  traffic,  with  only  a  slight  decrease  of  the  net  prod¬ 
uct,  and  that  this  deficit  tends  to  diminish.  Third,  that  the 
only  reason  that  can  possibly  induce  the  directors  of  corporate 
companies  to  reduce  their  tariff  is  the  single  one  of  expediency. 
The  first  two  propositions  he  proves  by  the  Belgian  and  Atlan¬ 
tic  cable  statistics.  The  Belgian  statistics  show  that  if  there 
had  been  no  reduction  of  rates  during  a  period  of  nineteen 
years,  there  would  have  been  a  much  larger  net  product,  while 
the  business  would  have  shown  a  very  small  increase.  Only 
264,504  telegrams  would  have  been  transmitted  in  1869,  in¬ 
stead  of  1,584,413,  the  number  actually  exchanged,  while  the 
net  product  for  the  same  year  would  have  been  502,000  francs 
against  23,856  francs.  The  history  of  the  Atlantic  Telegraph 
shows  that  if  the  average  rate,  £  12.84,  for  the  first  eleven 
months  had  been  continued,  the  net  result  would  have  been  an 
annual  dividend  at  the  present  time  of  twenty-seven  per  cent  a 
year  instead  of  ten  or  twelve  per  cent,  while  the  number  of  mes¬ 
sages  sent  would  have  been  114  a  day  against  860.  The  third 
rule  has  been  faithfully  carried  out  in  the  American  system ; 
high,  irregular,  and  arbitrary  rates  preventing  the  use  of  the 
telegraph  unless  in  exceptional  cases,  where  the  cost  is  of  slight 
consequence.  Though  the  rates  have  been  reduced  atout 
thirty-three  per  cent  within  the  last  five  years,  no  general  re¬ 
duction  has  been  made.  It  has  been  limited  to  particular 
cases,  where  the  rates  were  so  high  as  to  be  almost  prohibi¬ 
tory. 

Mr.  Wells,  in  a  pamphlet  lately  published  by  the  Western 
Union  Telegraph  Company  entitled  “  The  Relation  of  the  Gov¬ 
ernment  to  the  Telegraph,”  says  that  the  reduction  caused  by 
the  introduction  of  a  system  of  charges  according  to  the  air¬ 
line  distances  between  country  places  instead  of  by  the  route 


19 


actually  traversed  by  the  wires  resulted  in  a  loss  equal  to  fif¬ 
teen  per  cent,  while  the  introduction  of  half-rate  messages  by 
night  was  followed  by  another  reduction  in  the  net  receipts 
equal  to  sixteen  per  cent  in  the  rates,  and  thus  he  accounts  for 
the  entire  reduction.  In  Europe,  every  nation  has  adopted 
either  uniform  rates,  or  uniform  rates  for  equal  distances. 

The  appropriation  of  the  lines  of  telegraph  by  the  general 
government  has  been  recently  the  subject  of  discussion  both  in 
England  and  America.  The  same  system  prevailed  in  each, — 
high  rates,  limited  facilities,  and  small  growth.  The  contrast  be¬ 
tween  the  governmental  and  corporate  systems  in  England  and 
on  the  Continent  was  felt  by  the  English,  and  led  to  the  pur¬ 
chase  of  all  the  lines  of  telegraph  by  the  government  in  1870. 
The  business  had  increased  under  corporate  management  from 
six  millions  in  1866  to  eight  millions  in  1868,  or  fifteen  per 
cent  a  year.  Though  the  British  government  reduced  the 
rates  but  one  third,  the  increase  was  one  hundred  per  cent  in 
three  years,  with  a  great  increase  in  the  number  of  offices, 
against  an  increase  of  eighty  per  cent  in  five  years  in  our  own 
country.  These  results  have  necessarily  attracted  much  atten¬ 
tion  in  our  own  country.  The  Western  Union  Telegraph  Com¬ 
pany  have  been  forced  to  consider  them,  and  have  recently  em¬ 
ployed  the  ablest  statistician  of  our  own  country,  the  Hon. 
David  A.  Wells,  to  examine  the  European  and  their  own  sta¬ 
tistics,  to  deduce  from  them  his  own  conclusions.  So  short  a 
time,  however,  was  allowed  to  Mr.  Wells,  that  his  examination 
was  limited,  and  his  research  does  not  carry  the  conviction 
due  to  his  eminent  talent  and  fairness  of  mind. 

The  arguments  advanced  in  favor  of  a  change  of  our  system 
of  telegraph  are  drawn  from  the  high,  arbitrary,  and  discrimi¬ 
nating  rates  charged  to  the  public,  the  limited  facilities  fur¬ 
nished,  and  the  little  use  made  of  the  telegraph,  and  the  great 
power  it  confers  upon  a  monopoly.  During  the  past  winter, 
and  while  the  discussion  in  Congress  was  pending,  a  great 
reduction  of  rates  was  announced,  which  was  intended  as  a 
concession  to  the  public  demand  for  low  rates.  The  reduction, 
although  apparently  very  great,  gave  no  relief  to  the  people, 
for  it  was  not  a  general  reduction,  but  a  simple  lowering  of  all 
rates  above  $  2.50  to  that  sum,  and  of  some  rates  of  $  2.50  to 


20 


$  2.00.  The  people  cannot  afford  to  pay  either  of  these  sums 
for  ordinary  business  or  social  correspondence.  A  reduction, 
to  be  of  public  value,  must  be  so  great  as  to  induce  people  to 
use  the  telegraph  regularly  where  they  now  use  it  occasionally, 
and  to  increase  its  use  by  those  who  now  use  it  in  their  regular 
business. 

The  Western  Union  Telegraph  Company  divide  the  country 
into  three  districts,  —  the  Eastern,  Central  and  Western,  and 
Southern.  In  the  East  the  rates  are  thirty  cents  for  oVer 
twenty-five  miles,  and  not  over  fifty  miles ;  in  the  Central  and 
Western  division,  forty-five  cents  for  the  same  distance ;  and  in 
the  Southern  division,  fifty  cents.  That  these  rates  are  high  is 
evident  when  we  compare  them  with  the  Belgian  or  English 
rates,  which  are  respectively  ten  cents  and  twenty-five  cents  for 
the  same  distances  ;  double  the  number  of  words  being  trans¬ 
mitted  in  England,  and  one  half  as  many  more  in  Belgium, 
thus  increasing  the  disparity  ;  and  that  they  are  as  high  as  be¬ 
tween  our  principal  cities  where  the  distance  is  from  five  to 
eight  times  as  great.  These  rates  are  so  high  as  to  prohibit  all 
business  between  country  places  excepting  that  which  the  par¬ 
ties  are  compelled  to  send,  and  which  they  would  send  at  even 
greater  rates. 

There  is  one  exception  to  the  high  charges  of  the  Western 
Union  Telegraph  Company.  They  boast  that  the  rates  to  the 
press  are  lower  than  in  any  other  part  of  the  world ;  44  that 
they  deliver  to  the  press  of  the  United  States  annually,  for  less 
than  a  million  of  dollars  in  currency,  more  telegraphic  matter 
than  is  transmitted  by  all  the  other  telegraphs  in  the  world  ”  ; 
and  Mr.  Orton  has  said  that  44  he  would  undertake  to  produce 
an  American  journal,  printed  one  thousand  miles  from  the  At¬ 
lantic  coast,  that  should  contain  more  news  from  all  parts  of 
the  world  in  a  single  issue  than  could  be  gleaned  from  the 
4  London  Times  ’  in  a  week,”  and  that  44  the  press  are  perfectly 
satisfied  with  the  situation.”  A  statement  of  the  arrangement 
by  which  the  press  obtains  these  low  rates  will  show  that  in 
one  point  of  view  the  press  pays  very  dearly  for  them.  The  . 
Associated  Press  of  New  York,  in  connection  with  the  Western 
Union  Telegraph  Company,  collect  the  news  from  Europe,  and 
from  all  parts  of  our  own  country,  forward  it  to  some  conven- 


21 


ient  centre  for  collation,  preparation,  and  distribution,  and  then 
transmit  it  to  the  various  press  associations  in  all  portions  of 
the  country.  These  associations  are  therefore  dependent  upon 
this  double-headed  monopoly  formed  by  the  Telegraph  Compa¬ 
ny  and  the  Associated  Press  of  New  York.  No  new  associates 
are  admitted  into  any  press  association  without  the  assent  of 
every  other  member.  The  news  is  delivered  under  an  expressed 
or  implied  engagement  that  the  receivers  shall  neither  encour¬ 
age  nor  support  any  other  telegraph  corporation  ;  that  they  will 
protect  its  interests,  and  will  not  criticise  the  telegraphic  news. 
Thus  an  offensive  and  defensive  alliance  is  organized  for  the 
protection  of  the  telegraph  company  on  the  one  hand,  and  of 
the  Associated  Press  on  the  other,  by  which,  in  effect,  that 
press  is  subsidized.  The  Western  Union  Telegraph  Company 
can  afford  to  furnish  news  at  low  rates,  to  have  the  support  of 
the  press  in  its  extortions  upon  the  whole  people  ;  and  the  as¬ 
sociations  pay  for  this  by  defending  the  power  which  sustains 
their  exclusive  privilege  of  furnishing  news  to  the  public. 
The  arrangement  which  Mr.  Orton  boasts  of  is  therefore 
simply  a  combination  to  victimize  the  public ;  for  the  sake  of 
which  the  Associated  Press  sacrifices  its  character  and  in¬ 
dependence. 

From  time  to  time  members  of  the  press  have  advocated  a 
postal  telegraph,  or  have  criticised  the  telegraphic  reports,  but 
they  have  quickly  felt  the  power  of  the  telegraph  company, 
and  their  fate  has  proved  a  sufficient  warning  to  others  not  to 
offend  in  like  manner.  The  most  noted  are  the  “  Herald  ”  and 
“  Alta  California,”  both  of  San  Francisco,  and  the  “  Petersburg 
Index,”  of  Virginia.  The  California  papers,  the  one  in  1868,  and 
the  other  in  1872-73,  offended  by  advocating  a  reform  in  the 
telegraph  service.  They  were  promptly  punished,  —  the  “  Her¬ 
ald  ”  by  having  the  rates  raised  from  six  to  fifteen  cents  per 
word,  and  the  “  Alta  ”  by  the  entire  loss  of  the  despatches.  The 
telegraph  company  assign  as  the  reason  for  cutting  off  the  “  Al¬ 
ta  ”  that  they  had  great  difficulty  in  collecting  their  bills.  The 
Petersburg  paper  criticised  the  reports,  and  for  a  time  lost  its 
despatches.  The  telegraph  company  can  raise  or  reduce  the 
rates ;  and  though  they  make  contracts  with  the  various  asso¬ 
ciations,  they  are  generally  terminable  at  thirty  days’  notice. 


22 


Its  control  over  the  press  is  therefore  absolute.  It  has  the 
power  of  life  and  death,  for  the  telegraphic  news  is  the  vital 
breath  of  the  daily  newspaper.  Such  a  power  cannot  exist 
without  its  exerting  a  pernicious  influence  on  public  affairs,  and 
every  observant  public  man  has  long  perceived  the  demoraliz¬ 
ing  influence  of  this  powerful,  but  subtle  agency. 

Let  us  consider  the  power  of  the  telegraph  as  ah  educator  of 
the  people.  The  current  history  of  the  times  is  first  given  to 
the  country  through  the  telegraph.  “  Let  me  write  the  songs 
of  the  people,  and  I  care  not  who  makes  the  laws,”  is  an  old 
saying.  Here  it  would  be  truer,  if  less  poetical,  to  say  that 
the  man  who  rules  the  Associated  Press  is  master  of  the  situ¬ 
ation  ;  for,  if  he  has  the  ability  to  wield  it,  he  has  an  instru¬ 
ment  for  shaping  the  opinions  of  the  millions,  which,  by  the 
constancy,  universality,  and  rapidity  of  its  action,  defies  com¬ 
petition.  The  events  which  take  place  in  all  business,  politi¬ 
cal,  and  religious  centres,  together  with  the  actions  of  public 
men  and  their  imputed  motives,  are  all  presented  simultane¬ 
ously  to  the  public,  from  ocean  to  ocean,  through  this  instru¬ 
mentality.  The  agents  who  collect  the  news  respond  to  the 
central  authority  at  New  York,  and  are  subject  to  removal  at 
its  pleasure.  Here  is  a  power  greater  than  any  ever  wielded 
by  the  French  Directory ;  because,  in  an  era  when  public 
opinion  is  omnipotent,  it  can  give,  withhold,  or  color  the  infor¬ 
mation  which  shapes  that  opinion  at  its  pleasure.  It  may  im¬ 
part  an  irresistible  power  to  the  caprice  of  an  individual,  and 
the  reputation  of  the  ablest  and  purest  public  man  may  be 
fatally  tainted  in  every  town  and  village  on  the  continent  by 
a  midnight  despatch.  It  is  incompatible  with  public  safety 
that  such  an  exclusive  power  to  speak  to  the  whole  public  at 
the  same  moment  upon  every  subject,  and  thus  to  create  pub¬ 
lic  opinion,  should  be  under  the  absolute  control  of  a  corpora¬ 
tion.  The  obstacles  which  the  telegraph  and  these  associa¬ 
tions  can  throw  in  the  way  of  any  new  journal  amount  to 
virtual  prohibition  against  publishing  a  first-class,  independent 
newspaper  in  the  land,  and  thus  the  existing  combination  has 
possession  of  the  exclusive  privilege  of  making  the  first  and, 
with  many,  the  last  impression  of  every  event. 

The  abuses  of  this  system  are  growing,  and  will  increase 


23 


rapidly  until  the  government  interferes  to  perform  the  duties 
for  which  it  was  constituted,  —  to  protect  the  people;  until 
the  rates  for  the  press  are  fixed  by  law,  equal  rights  and  privi¬ 
leges  secured  to  all,  with  rates  so  low  that  all  can  use  the  tele¬ 
graph.  Not  until  then  will  a  free  and  independent  press  be 
assured  to  the  country. 

These  suggestions  show  that  the  telegraph  may  become  a 
controlling  power  in  politics.  It  can  ally  itself — and  probably 
will  at  no  distant  day  —  with  kindred  monopolies,  and  aspire 
to  supreme  power.  Giving  the  word  of  command  to  the  sup¬ 
porters  of  these  vast  interests,  and  having  exclusive  and  simul¬ 
taneous  access  to  the  public  mind,  such  combinations  may  at 
critical  moments  seize  the  power  of  the  government. 

The  telegraph  should  also  be  .considered  as  a  means  of  spec¬ 
ulation.  The  entire  commercial  news  of  the  European  mar¬ 
kets  is  daily  gathered  in  England,  transmitted  to  New  York, 
and  received  about  noon  by  the  Commercial  Bureau  of  the 
Western  Union  Telegraph  Company.  They  tolerate  no  com¬ 
petition  in  this  branch  of  their  business,  and  allow  no  other 
party  to  receive  and  forward  the  commercial  news  to  associa¬ 
tions  of  merchants.  As  soon  as  it  is  received,  all  business 
upon  the  wires  leading  to  the  chief  cities  of  the  country  is 
stopped  until  the  news  has  been  forwarded  to  its  agents  in 
each  of  these  cities.  Its  agents,  therefore,  have  the  first 
information  of  all  commercial  as  well  as  political  news ;  and 
every  one  knows  how  sensitive  are  the  markets.  Is  a  report 
circulated  that  the  Secretary  of  the  Treasury  proposes  to  issue 
more  currency,  stocks  advance  ;  that  the  Pacific  Mail  is  to  be 
investigated  by  a  Congressional  committee,  they  fall.  It  has 
been  said  by  members  of  Congress  that  a  careful  examination 
will  show  that  wherever  the  reporters  favor  a  particular  mem¬ 
ber  or  measure,  his  speeches  and  the  arguments  for  such  meas¬ 
ure  are  carefully  reported,  to  the  neglect  of  their  opponents. 
The  control  of  the  telegraph  gives  to  its  manager  the  ability 
to  speculate,  without  the  possibility  of  loss,  in  any  article  in 
every  market  of  the  world. 

As  it  is  idle  to  expose  the  evils  of  any  system  unless  a 
remedy  is  suggested,  let  us  inquire  whether  there  be  any  in 
this  matter. 


24 


The  Constitution  gives  Congress  the  power  to  establish  post- 
offices  and  post-roads.  The  object  of  this  grant  is  to  enable  it 
to  transmit  correspondence.  The  manifest  intention  of  the  , 
Constitution  was  to  confer  full  power  over  the  whole  business  of 
transmitting  correspondence.  Congress,  having  undertaken  to 
exercise  that  power,  established  the  offices  and  routes,  and 
adopted  each  improvement  in  the  means  of  transmission  that 
was  discovered,  and  ought  now  to  adopt  this  latest  and  greatest 
improvement,  the  electric  telegraph.  It  has  not  only  exercised 
this  power  in  all  other  forms,  but  has  always  asserted  its  exclu¬ 
sive  right  to  carry  on  the  business,  and  has  punished  severely 
all  who  carried  outside  of  the  mails  letters  upon  which  the 
postage  had  not  been  paid.  The  whole  subject  is  essentially 
national,  and  the  fact  that  it  is  expressly  intrusted  by  the  Con¬ 
stitution  to  the  general  government  shows  that  it  is  not  private, 
but  public  business.  That  the  framers  of  the  Constitution 
correctly  understood  its  character  is  obvious  on  a  slight  con¬ 
sideration.  If  the  transmission  of  the  mails  had  been  left  to 
private  parties,  it  would  no  doubt  have  been  carried  on  between 
the  larger  cities  and  in  populous  districts ;  but  unless  the  gov¬ 
ernment  had  kept  up  lines  of  communication  between  the  ex¬ 
tremities  of  the  territory,  and  even  between  country  towns, 
there  would  have  been  no  general  postal  system.  In  the  popu¬ 
lous  regions  the  rates  of  postage  would  have  been  prohibitory 
of  extensive  correspondence,  because  the  business  would  have 
fallen  into  the  hands  of  the  monopolists,  as  has  been  the  case 
with  the  telegraph. 

There  are  but  two  questions  :  First,  whether  it  is  for  the  in¬ 
terests  of  the  people  that  the  transmission  of  correspondence 
should  be  intrusted  to  the  government  rather  than  to  private 
monopolists.  Our  forefathers  in  their  wisdom,  decided  in  the 
affirmative,  and  gave  Congress  the  conduct  of  the  postal  sys¬ 
tem,  in  order  to  secure  responsibility  and  good  service,  know¬ 
ing  that,  though  there  would  be  abuses,  there  would  be  less 
than  if  the  people  were  left  wholly  to  the  only  alternative,  an 
irresponsible  monopoly.  Congress,  in  the  exercise  of  the 
power  conferred  upon  it,  has  already  created  post-offices  and 
post-roads  in  all  parts  of  the  country,  and  the  mails  are  carried 
to  every  village  in  our  land.  The  free  interchange  of  corre- 


% 


25 


spondence  is  a  modern  necessity,  and  has  kept  pace  with  the 
advance  of  civilization  and  freedom.  Exclusion  from  it  is  sep¬ 
aration  from  the  world,  and,  if  it  results  from  the  imposition  of 
unreasonable  rates,  is  a  denial  of  a  right.  This  right  of  corre¬ 
spondence  belongs  to  the  people,  and  extends  to  all  the  modes 
of  communication  now  in  use  or  which  may  ever  come  into 
use. 

Second,  shall  the  telegraph,  the  greatest  improvement  for 
the  rapid  transmission  of  correspondence,  be  open  to  the  peo¬ 
ple,  or  remain  the  peculiar  property  of  the  wealthy  ? 

The  telegraph  is  now  recognized  as  an  important  vehicle  for 
the  transmission  of  correspondence,  and,  under  legitimate  con¬ 
trol,  will  soon  absorb  a  considerable  portion  of  it.  The  gov¬ 
ernment  cannot,  therefore,  abdicate  its  control  over  this  agency 
with  any  greater  propriety  than  it  can  surrender  that  over  cor¬ 
respondence  by  railroad  or  steamboat.  All  classes  and  every 
individual  in  the  community  are  directly  interested  in  the  tele¬ 
graph  ;  it  is  of  public  concern,  and  not  a  mere  private  matter. 
It  is  a  national  business,  which  recognizes  neither  State  bound¬ 
aries  nor  sectional  limits.  No  State  legislation  can  properly 
regulate  it ;  Congress  alone  possesses  adequate  power. 

It  is  only  an  instrument  for  the  transmission  of  correspond¬ 
ence  which  before  its  invention  was  sent  by  mail.  The  same 
organization  which  now  furnishes  the  offices,  keeps  the  ac¬ 
counts,  receives  and  delivers  all  other  letters,  will  suffice,  with 
some  increase  in  its  force  and  efficiency,  for  the  performance  of 
the  same  business  for  the  telegraphic  correspondence.  We  are 
now  maintaining  two,  and,  in  many  places,  three  or  four  or¬ 
ganizations  for  the  same  purpose,  where  one  could  perform 
the  whole,  and  afford  ampler  facilities  for  telegraphic  corre¬ 
spondence  than  are  now  provided,  at  an  annual  saving  of  be¬ 
tween  two  and  three  millions  of  dollars.  No  one  proposes  to 
surrender  the  transmission  of  the  entire  correspondence  to  a 
corporate  monopoly,  or  doubts  what  would  be  the  results  if 
these  corporations  controlled  the  charges  for  postage. 

Two  methods  have  been  proposed  for  exercising  this  power 
and  uniting  the  telegraph  to  the  postal  service.  One,  by  the 
present  Postmaster-General,  which  simply  copies  the  European 
system,  and  provides  for  the  reception  and  delivery  by  the 


26 


Post-Office  Department  of  telegrams  transmitted  over  lines 
constructed,  owned,  and  operated  by  the  Department  at  rates 
fixed  by  Congress.  The  other,  proposed  by  a  former  Post¬ 
master-General  (Randall),  provides  that  telegrams  shall  be  re¬ 
ceived  and  distributed  through  the  post-office  as  by  the  other 
system,  and  transmitted  like  other  postal  matter  by  parties 
owning  and  operating  the  lines,  and  contracting  to  perform  the 
service  at  rates  fixed  by  Congress.  The  two  plans  were  sub¬ 
mitted  to  standing  committees  of  the  Senate  and  House  of 
Representatives  of  the  last  Congress,  and  after  a  full  discus¬ 
sion,  at  which  all  parties  interested  were  represented,  the  Post¬ 
master-General  advocating  the  government  plan,  Mr.  Hubbard 
the  postal  system,  Mr.  Orton  and  other  representatives  of  tele¬ 
graph  companies  opposing  any  change,  the  committees  con¬ 
sidered  the  subject  independently  of  each  other,  and  were 
unanimous  in  their  rejection  of  the  plan  of  the  Postmaster- 
General,  and  the  adoption  of  the  postal  system  advocated  by 
Mr.  Hubbard.  These  committees,  in  carefully  prepared  reports, 
submitted  the  measure  to  Congress.  Owing  to  the  want  of 
time  during  the  last  session,  the  bills  reported  to  the  Senate  and 
House  were  not  considered ;  but  it  is  understood  that  they  will 
be  acted  upon  at  an  early  day  in  the  next  Congress.  As  the 
same  advantages  will  be  obtained  by  the  public  under  either 
plan,  and  as  the  one  will  cost  many  millions  of  dollars,  and  in¬ 
crease  the  power  and  patronage  of  the  Executive,  no  one  will 
be  surprised  at  the  conclusions  at  which  the  committees  ar¬ 
rived.  The  reduction  in  rates  will  be  greater  than  that  made 
in  England,  where  an  expenditure  of  forty  millions  of  dollars 
was  incurred  in  the  purchase  of  the  lines  by  the  government ; 
and  the  rates  will  be  as  low  as  they  could  be  under  a  purely 
governmental  system  conducted  without  loss.  By  such  an  ar¬ 
rangement  the  government  will  take  the  same  charge  over  the 
telegraphic  branch  of  the  postal  service  which  it  now  exercises 
over  communications  transmitted  by  rail  or  post-coach,  without 
investing  in  telegraphic  lines  any  more  than  it  does  in  rail¬ 
roads  and  post-coaches,  and  will  as  effectually  guard  the  citizen 
against  extortionate  rates  and  unjust  discriminations. 

Various,  considerations  are  urged  against  the  transfer  of  the 
telegraph  to  the  Post-Office  Department.  Some  think  that  the 


27 


country  which  is  the  least  governed  is  the  best,  and  that  no 
business  should  be  intrusted  to  the  government  which  private 
enterprise  can  transact,  because  every  government  performs  its 
work  at  a  greater  expense  than  corporations,  and  our  govern¬ 
ment  is  more  extravagant  than  any  other.  There  is  no  doubt  of 
the  general  truth  of  the  first  part  of  this  proposition,  and  it  can 
be  carried  further,  for  all  corporate  work  costs  more  than  pri¬ 
vate.  Yet  this  fact  does  not  prevent  us  from  continually  char¬ 
tering  new  corporations,  nor  from  intrusting  certain  duties  to 
the  government.  Our  education,  banking,  and  postal  system 
are  conducted  or  regulated  directly  by  the  State  and  general 
governments.  It  does  not  solve  the  question  to  say  that  gov¬ 
ernment  work  is  more  expensive  than  corporate,  but  we  must 
consider  for  whose  benefit  is  the  greatest  economy.  Do  the  peo¬ 
ple  share  in  the  benefit,  or  does  it  enure  wholly  to  the  stockhold¬ 
ers  of  the  corporation  ?  All  experience  shows  that  the  same 
self-interest  which  impels  a  corporation  to  have  its  work  done 
as  cheaply  as  possible  also  leads  it  to  get  all  it  can  out  of  the 
people.  The  statistics  prove  that  telegraphic  management  in 
private  hands  does  not  result  in  either  economy  or  efficiency  of 
service  to  the  public. 

All  the  telegraphs  on  the  Continent  of  Europe  are  owned  and 
operated  by  the  government.  In  England,  before  1870,  they 
were  managed  by  private  corporations,  as  they  still  are  in 
America.  The  first  cost  of  government  works  is  less,  the 
rates  are  much  lower,  the  facilities  offered  greater,  and  they 
are  planned  on  a  comprehensive  system,  with  reference  to  the 
wants  of  the  whole  country,  and  not  alone  to  those  places 
where  it  will  pay  best.  The  rates  in  the  principal  countries  of 
Europe  are  less  than  one  half  those  in  England  under  the  cor¬ 
porate  system,  or  in  America.  The  post-office  is  the  only  gov¬ 
ernmental  work  in  this  country  in  which  the  people  are  directly 
interested ;  the  service  it  renders,  in  proportion  to  the  facilities 
furnished,  the  work  performed,  and  the  distance  of  transmis¬ 
sion,  is  cheaper  than  that  of  any  other  country  in  the  world, 
and  it  will  at  least  compare  favorably  with  the  express  business. 
The  cost  on  each  letter  is  a  little  less  than  two  cents  in  Great 
Britain,  a  little  over  three  in  the  United  States,  while  the  num¬ 
ber  of  letters  in  proportion  to  the  offices  is  much  less,  and  the 


28 


average  distance  of  transmission  more  than  three  times  as 
great. 

But  some  who  admit  the  evils  of  the  present  system  and  the 
advantages  of  a  postal  system  think  that  by  the  transfer  of  the 
telegraph  to  the  postal  service  the  power  of  the  Executive 
would  be  so  greatly  increased  as  to  outweigh  all  the  benefits 
that  would  result  from  it.  All  political  influence  arises  either 
from  the  patronage  it  would  give  the  Executive,  the  ability  to 
send  free  telegrams,  the  control  of  the  press,  or  the  power  of 
espionnage  over  the  correspondence.  As  these  powers  are 
now  held  by  a  private  corporation,  the  question  is  reduced  to  a 
consideration  of  the  expediency  of  leaving  them  to  private  and 
irresponsible  parties,  of  intrusting  them  to  the  Post-Office  De¬ 
partment,  or  of  limiting  these  powers  and  dividing  them  be¬ 
tween  private  parties  and  the  Post-Office  Department,  so  as  to 
secure  the  advantages  of  both  systems.  These  objections  ap¬ 
ply  with  much  greater  force  to  the  plan  of  the  Postmaster- 
General,  which  provides  for  governmental  ownership,  opera¬ 
tion,  and  control  of  the  business,  than  to  the  postal  system. 
Under  it  there  will  be  no  patronage,  excepting  that  arising 
from  the  addition  of  a  few  clerks  and  carriers,  less  in  number 
than  the  annual  increase  from  the  growth  of  business.  The 
free  transmission  of  messages  by  passes,  so  constantly  given  to 
members  of  Congress  and  others  where  they  will  “  do  the  most 
good,”  is  not  only  prohibited,  but  both  the  post-office  and  the 
company  are  directly  interested  to  have  every  telegram  fully 
paid,  and  neither  can  send  a  free  despatch  without  the  conni¬ 
vance  of  the  other.  There  can  be  no  control  over  the  press, 
for  all  will  have  the  right  to  send  and  receive  despatches  at 
fixed  rates,  and  so  low  that  every  paper  can  obtain  “  specials  ” 
cheaper  than  they  now  get  the  Associated  Press  news. 

Espionnage ,  or  the  power  of  the  postmasters,  dependants 
upon  the  Executive,  to  examine  private  telegraphic  correspond¬ 
ence,  is  severely  punished  by  law,  and  is  to  a  great  degree 
thwarted  by  the  fact  that  the  operators  are  employed  and  paid 
by  the  company,  and  without  their  connivance  the  power  would 
be  of  little  use ;  and,  moreover,  the  number  of  telegrams  will 
be  so  greatly  increased  by  the  low  rates  and  additional  facili¬ 
ties  as  to  remove  the  possibility  of  any  considerable  tampering 
with  their  contents. 


29 


The  postal  system  recognizes  both  the  necessity  of  regulat¬ 
ing  the  business  and  the  importance  of  securing  that  economy 
which  private  interests  impart.  It  restrains  the  powers,  cor¬ 
rects  abuses,  reduces  rates,  increases  facilities,  confers  no  new 
powers  on  the  Post-Office  Department,  but  simply  extends  its 
operations  by  the  employment  of  a  new  agency  for  the  trans¬ 
mission  of  correspondence.  It  provides  for  the  purchase  of  all 
existing  lines  at  an  appraised  valuation,  their  incorporation 
into  a  company  which  at  its  own  expense  will  furnish  and 
operate  the  lines  necessary  for  transmitting  telegraphic  corre¬ 
spondence  between  the  postal  telegraph  offices,  depending  upon 
private  capital,  skill,  and  economy  for  success.  The  company 
will  derive  its  entire  profits  from  the  receipts  of  the  business, 
which  are  the  only  funds  from  which  it  can  draw  its  income. 
It  will  have  a  direct  pecuniary  interest  to  see  that  the  post- 
office  performs  its  share  of  the  work  promptly  and  efficiently. 
The  present  is  substantially  a  railroad  and  not  a  postal  system, 
and  at  many  offices  the  railroad  business  has  preference  over 
all  other.  This  places  it  on  a  distinct  footing.  The  railroad 
telegraphic  business  will  be  managed  by  those  corporations 
without  interference  by  the  government,  and  the  telegraphic 
correspondence  by  the  Post-Office  Department. 

The  telegraph  is  shorn  of  its  power  over  private  correspond¬ 
ence  and  mercantile  news  by  subjecting  it  to  fixed  and  impar¬ 
tial  rules  and  uniform  rates,  so  low  that  all  can  freely  use  it. 
The  power  is  divided  between  the  department  and  corporation, 
so  that  neither  can  use  it  to  the  injury  of  the  public,  while  the 
distinct  interests  of  the  two  oppose  combination. 

The  Postmaster-General  has  the  same  means  for  enforcing 
the  prompt  and  accurate  transmission  of  this  as  of  all  other 
correspondence.  No  monopoly  is  conferred,  and  any  company 
can  transmit  telegrams  if  they  can  do  so  more  satisfactorily  to 
the  public.  The  rates  are  fixed  at  twenty-five  cents  between 
offices  not  over  250  miles  apart,  fifty  cents  between  250  and 
500  miles,  seventy-five  cents  between  500  and  1,500  miles,  and 
one  dollar  and  a  half  for  all  greater  distances.  Letters  are 
generally  written  after  the  close  of  business  hours  and  sent  by 
the  night  mail.  To  provide  for  this  correspondence  the  rates 
for  night  telegrams  are  fixed  at  twenty-five  cents  for  distances 


30 


under  1,500  miles,  and  seventy-five  cents  for  greater  distances. 
These  rates  will  be  prepaid  by  telegraphic  stamps  sold  at  the 
post-offices.  The  department  will  retain  five  cents  for  its  ser¬ 
vice,  and  pay  the  rest  to  the  company  as  full  compensation  for 
furnishing  and  operating  the  lines.  The  length  of  the  tele¬ 
graphic  letter  is  increased  to  twenty-five  words,  including 
address  and  signature.  Every  post-office  near  a  telegraph  line 
is  made  a  postal  telegraph  office,  while  others  are  established 
wherever  they  now  are  or  may  be  required  by  the  wants  of  busi¬ 
ness.  This  will  make  a  reduction  in  rates  of  fifty  per  cent, 
and  an  increase  in  the  length  of  the  message  of  eighty  per 
cent,  and  in  the  number  of  offices ’of  over  one  hundred  per 
cent.  These  great  reductions  and  increased  facilities  will 
bring  the  telegraph  within  the  reach  of  all,  and,  when  in  full 
operation,  will  give  us  the  best  telegraph  system  in  the  world. 

The  postal  system  recognizes  the  rights  of  property  in  the 
owners  of  the  existing  lines,  proceeding  upon  the  ground  that 
to  make  any  new  plan  successful  it  must  avail  itself  of  the 
services  and  co-operation  of  the  present  able  managers ;  that 
this  can  only  be  accomplished  by  paying  liberally  for  the  prop¬ 
erty  it  purchases  of  them,  and  that  it  will  be  much  more  advan¬ 
tageous  to  the  public  to  secure  this  harmonious  co-operation, 
even  by  paying  a  large  price  for  its  property,  than  to  establish 
a  system  at  a  very  much  smaller  price,  but  in  competition  with 
the  Western  Union  Telegraph  Company. 

It  is  not  contended  that  the  postal  system  is  free  from  de¬ 
fects,  but  that  it  removes  many  of  the  grave  evils  of  the  present 
system,  without  the  introduction  of  new  ones,  and  that  the 
balance  of  benefits  greatly  preponderates  in  favor  of  the  cheap 
rates,  increased  facilities,  limited  and  divided  powers  of  the 
postal  system. 


Gardiner  G.  Hubbard. 


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